The tax scale (skala podatkowa, 12% and 32%) is the basic way of settling personal income tax in Poland, and for business income it is the default form — it applies unless the entrepreneur chooses another one. The system has a progressive structure of rates, which means that the higher the income, the higher the tax rate. In 2026 the same tax thresholds apply as in 2023–2025, but it is worth knowing all the rules and mechanisms of this system in detail.
Taxation under the general rules (zasady ogólne), called the tax scale, is a frequently chosen method of settling with the tax authorities among Polish entrepreneurs. It has two basic tax thresholds and additional rules on the tax-free amount. The system is designed to spread the tax burden in proportion to the income earned.
Tax thresholds in 2026
The structure of tax thresholds in 2026 remains unchanged compared with the previous year. The key feature of the tax scale is the existence of tax thresholds, which set different tax rates depending on the level of income earned.
In 2026 the income tax rate in the first tax threshold is 12 percent, and in the second tax threshold it is 32 percent. The tax threshold in 2026 is PLN 120,000, which means that income up to this amount is taxed at 12 percent
The first tax threshold covers income up to PLN 120,000 a year. All taxpayers whose annual income does not exceed this limit pay tax at 12 percent. This is a preferential rate, introduced as part of a tax reform aimed at reducing the tax burden on people with lower and middle incomes.
The second tax threshold applies to income above PLN 120,000 a year. Tax at 32 percent is charged on the excess over this amount. This means that a taxpayer earning, for example, PLN 150,000 will pay 12 percent on the first PLN 120,000 and 32 percent on the remaining PLN 30,000.
| Tax threshold | Tax rate | Income limit 2025 | Income limit 2026 |
|---|---|---|---|
| 1st threshold | 12% | up to PLN 120,000 | up to PLN 120,000 |
| 2nd threshold | 32% | over PLN 120,000 | over PLN 120,000 |
| Solidarity levy | 4% | over PLN 1,000,000 | over PLN 1,000,000 |
Taxpayers must also bear in mind the solidarity levy (danina solidarnościowa), commonly called the third tax threshold. The solidarity levy is 4 percent and is calculated on income above PLN 1,000,000, regardless of the income tax calculated at the 32 percent rate
The solidarity levy is an additional burden on the wealthiest taxpayers. As a result, income above PLN 1,000,000 is taxed twice — at 32 percent and with the 4 percent solidarity levy. This means that the effective rate on the excess of scale-taxed income over one million zloty is 36 percent in total.
Tax thresholds 2025 and 2026 — tax calculation table
The way income tax is calculated under the tax scale is governed by Article 27(1) of the PIT Act. This provision sets out how tax is calculated both for the monthly or quarterly advances paid during the tax year and for the tax resulting from the annual tax return filed after the year ends.
| Tax base | Tax rate | How it is calculated |
|---|---|---|
| Up to PLN 120,000 | 12% | 12% minus the tax-reducing amount |
| Above PLN 120,000 | 32% | PLN 10,800 + 32% of the surplus above PLN 120,000 |
| Tax-free amount | 0% | PLN 30,000 a year |
The tax on the surplus in the second tax threshold is added to the first-threshold tax, which is at most PLN 10,800 (PLN 120,000 × 12% - PLN 3,600).
Special rules for young taxpayers
Young taxpayers can use an exemption from income tax known as the relief for young people (ulga dla młodych, Article 21(1)(148) of the PIT (personal income tax) Act). However, the exemption covers only the employment-type income listed in the Act — it does not apply to business income.
In 2026 the limit of the relief for young people has not changed either, and the PIT exemption covers revenue up to PLN 85,528, not, as one might think, up to PLN 120,000. This preference applies to taxpayers until they turn 26
People under 26 are exempt from income tax on revenue from an employment relationship, contracts of mandate (umowa zlecenia), graduate internships, student apprenticeships and maternity benefit up to PLN 85,528 a year. A young entrepreneur's revenue from business activity is not covered by this exemption and is taxed under the general rules.
It is worth stressing that this limit is independent of the general thresholds of the tax scale. This means that a young employee or contractor can earn revenue of up to PLN 85,528 without paying income tax, even though the first tax threshold is PLN 120,000. The limit is shared between the relief for young people, the return relief, the relief for families with 4+ children and the relief for working seniors (Article 21(44) of the PIT Act).
Once the PLN 85,528 limit is exceeded, the excess revenue (after deducting costs and contributions) is taxed under the tax scale — within the first threshold at 12 percent, taking the tax-reducing amount into account.
Tax-free amount in 2026
The tax-free amount (kwota wolna od podatku) is one of the most important elements of the tax system and directly affects every taxpayer's tax liability. The way it works is closely linked to the system of tax thresholds and significantly affects the final amount of tax payable.
Historically, the tax-free amount was raised in 2022, has been kept in the following years and in 2026 amounts to PLN 30,000. This was an increase of as much as PLN 22,000, because until the end of 2021 the tax-free amount was only PLN 8,000
The significant increase of the tax-free amount from PLN 8,000 to PLN 30,000 in 2022 was one of the biggest tax reforms of recent years. The change brought tangible benefits to taxpayers settling under the tax scale, especially those with lower incomes, for whom the relief matters most in relative terms. At the same time, since 2022 the health insurance contribution can no longer be deducted from tax under the tax scale (Article 27b of the PIT Act has been repealed).
Together with the new tax-free amount, the tax-reducing amount (kwota zmniejszająca podatek) also changed; in 2026 it is PLN 3,600. It is calculated as the product of the tax-free amount and the first-threshold tax rate (30,000 × 12% = PLN 3,600). For employees, the tax-reducing amount is applied to monthly advances once a PIT-2 has been filed — we explain this in our article on the employee's tax-free amount and PIT-2.
| Period | Tax-free amount | Tax-reducing amount |
|---|---|---|
| until the end of 2021 | PLN 8,000 | PLN 1,360 |
| 2022 | PLN 30,000 | PLN 5,100 / PLN 3,600 |
| 2026 | PLN 30,000 | PLN 3,600 |
The tax-reducing amount is simply the tax calculated on the tax-free amount. In practice this means that every taxpayer settling under the tax scale can reduce their tax liability by PLN 3,600 a year, regardless of the level of income. Tax advances and the annual return of a business owner on the tax scale are prepared by the accountants at our accounting firm in Warsaw.
In practice, the tax-free amount means that taxpayers with annual income of up to PLN 30,000 pay no income tax. Taxpayers with higher income pay tax only on the amount above PLN 30,000. For example, a taxpayer with income of PLN 50,000 a year pays tax only on PLN 20,000. For an employee, the tax-reducing amount is taken into account in the advances once they submit a PIT-2 statement to the payer (Article 31b of the PIT Act).
The tax-free amount is particularly important for low-income taxpayers, including pensioners, students taking up work and people starting a business. For these groups it is significant financial support, increasing their disposable income.
How the tax-free amount works
The way the tax-free amount works has changed significantly in recent years, which has simplified settlements and made the system more transparent. Understanding this mechanism is key to planning your tax burden correctly.
Until the end of 2021, the advance income tax payment included a fixed flat tax-reducing amount of PLN 525.12. Only in the annual tax return was this value finally verified, because of its degressive nature
The earlier system was degressive, which meant that as income grew, the tax-reducing amount available decreased. This complicated mechanism required additional calculations and adjustments in the annual settlement.
Since January 2022 the tax-reducing amount has been fixed, whether it concerns the advance income tax payment or the annual settlement. This change significantly simplified settlements and made the tax burden more predictable.
For business activity, income tax is calculated on a cumulative basis from the beginning of the year, and the tax-free amount in 2026 is PLN 30,000. This means that an entrepreneur does not pay an advance until income from the beginning of the year exceeds PLN 30,000 (Article 44(3) of the PIT Act), and over the whole year the tax-reducing amount lowers the tax by PLN 3,600 in total — not by PLN 3,600 every month.
The rate cut from 17% to 12% — benefits for taxpayers
The tax thresholds applying in 2026 were introduced by the 2022 tax changes: from 1 January 2022 the threshold was raised from PLN 85,528 to PLN 120,000, and the tax-free amount to PLN 30,000. The most important change was the cut in the first-threshold rate from 17% to 12% from 1 July 2022 (with the tax-reducing amount lowered from PLN 5,100 to PLN 3,600). The change still applies in 2026, and a rate cut of 5 percentage points means a real increase in taxpayers' net income.
The benefits are felt particularly by taxpayers with income in the first tax threshold. Every taxpayer whose annual income is between PLN 30,000 and PLN 120,000 pays less income tax. The higher the income within this range, the larger the benefit in złoty from the rate cut.
Taxpayers whose income exceeds the first tax threshold also benefit from the changes. The part of their income up to PLN 120,000 is taxed at the more favourable 12% rate, which translates into savings of PLN 4,500 a year compared with the previous 17% rate with a tax-reducing amount of PLN 5,100 (PLN 15,300 instead of PLN 10,800 on the first PLN 120,000)
The new rates can be illustrated with specific examples. A taxpayer with annual income of PLN 90,000 would have paid tax of PLN 10,200 before the changes (under the rules of the first half of 2022) (90,000 × 17% - 5,100). After the changes, the same taxpayer pays PLN 7,200 (90,000 × 12% - 3,600), a saving of PLN 3,000 a year. For a taxpayer with income of PLN 60,000 a year the saving is PLN 1,500 (PLN 3,600 instead of PLN 5,100 in tax).
The second example concerns a taxpayer with higher income. In 2026 this taxpayer earned income of PLN 220,000. Before the changes, the tax would have been PLN 47,300, calculated as 120,000 × 17% + (220,000 - 120,000) × 32% - 5,100. After the changes, the tax is PLN 42,800, calculated as 120,000 × 12% + (220,000 - 120,000) × 32% - 3,600. The saving is PLN 4,500.
People working under an employment contract also benefit from the changes to the tax thresholds. Employers calculate income tax advances at the new rates, which means higher net salaries for employees with income in the first tax threshold
Taxpayers with very high income, well above the second tax threshold, also benefit, though less in relative terms. The saving from the lower first-threshold rate is at most PLN 4,500 a year for them, which at high income levels is a relatively small percentage of the total tax burden.
Calculating tax under the tax scale in practice
Calculating income tax under the tax scale requires taking into account all elements of the tax system, including the tax thresholds, the tax-free amount and any additional charges. Understanding this process correctly is essential for every entrepreneur.
Income tax under the tax scale is calculated as follows:
- Determine the tax base (taxable income)
- Apply the appropriate tax rate depending on the level of income
- Calculate the tax due at the applicable rate or rates
- Deduct the tax-reducing amount of PLN 3,600
- Check whether income exceeds the solidarity levy threshold
In accounting systems, the advance tax payment is calculated automatically in line with the current rules. The 12 percent tax rate in the first tax threshold and the PLN 3,600 tax-reducing amount are therefore taken into account
For income not exceeding PLN 120,000 a year the calculation is relatively simple. Tax is calculated at 12 percent on the whole income, and then the tax-reducing amount of PLN 3,600 is deducted.
Example calculation for income of PLN 80,000:
- Tax at 12%: 80,000 × 12% = PLN 9,600
- Tax-reducing amount: PLN 3,600
- Tax payable: 9,600 - 3,600 = PLN 6,000
For income above PLN 120,000 the calculation requires two tax rates. The 12 percent rate applies to the amount up to PLN 120,000, and the 32 percent rate to the excess.
An entrepreneur earned income of PLN 180,000 in 2026. The tax is calculated as follows: on the first PLN 120,000 at 12% (PLN 14,400), on the excess of PLN 60,000 at 32% (PLN 19,200). The total tax before deducting the tax-reducing amount is PLN 33,600, and after deducting PLN 3,600, PLN 30,000 remains to be paid.
Effective tax rate in the first and second threshold
A taxpayer with income at the level of the first threshold pays an effective tax rate much lower than the nominal 12% rate because of the tax-reducing amount. A taxpayer with income of PLN 120,000 pays tax of PLN 10,800 (120,000 × 12% - 3,600), an effective rate of 9%.
Taxpayers with income in the second tax threshold pay a higher effective tax rate. A taxpayer with income of PLN 200,000 pays tax of PLN 36,400 (10,800 + 80,000 × 32%), an effective rate of 18.2%. The higher the income, the higher the effective tax rate.
Solidarity levy – the third tax threshold
The solidarity levy, often called the third tax threshold, is an additional charge on taxpayers with the highest incomes. It was introduced to make the tax system more progressive and to raise additional funds for social purposes.
The solidarity levy is 4 percent and is calculated on income above PLN 1,000,000 a year. Importantly, the levy is calculated regardless of the income tax calculated at the 32 percent rate, which means the highest incomes are taxed twice.
Income above PLN 1,000,000 is taxed twice: at 32 percent and with the 4 percent solidarity levy. As a result, the effective tax rate on income above one million zloty is 36 percent in total
The solidarity levy is charged as follows:
- On income up to PLN 1,000,000 – the standard tax-scale rates
- On the excess over PLN 1,000,000 – the 32% rate plus the 4% solidarity levy
- Total burden on the excess – 36 percent
No tax reliefs apply to the solidarity levy. Its base is the excess over PLN 1,000,000 of the sum of income taxed, among others, under the tax scale, the flat 19% tax (podatek liniowy) and capital income (Article 30b), reduced only by deducted social insurance contributions (Article 30h(2) of the PIT Act).
Monthly advances and the annual settlement
Income tax in Poland is settled through monthly advance payments and a final annual settlement. This two-stage process spreads the tax burden over time and allows final adjustments to be made at the end of the tax year.
Monthly advances are calculated on a cumulative basis, which means that each month the total income earned since the beginning of the year is taken into account. This ensures that the tax thresholds and the tax-free amount are applied correctly.
If the first tax threshold is exceeded during the year, the system automatically switches to the higher tax rate for the excess. The same happens when the solidarity levy threshold is exceeded.
- Each month the tax is calculated on income accumulated since the beginning of the year
- Advances already paid in previous months are deducted
- The difference is the advance payable for the given month
- At the end of the year the final settlement is made in the tax return
For business advances, the tax-free amount of PLN 30,000 is taken into account in the cumulative calculation, and the tax-reducing amount of PLN 3,600 reduces the tax on income from the beginning of the year only once. It is deducted proportionally, PLN 300 (1/12) in each monthly advance, by a payer, e.g. an employer who has received a PIT-2 statement (the taxpayer's statement for calculating monthly advances)
The annual settlement allows final adjustments to be made, all tax reliefs to be taken into account and the advances paid to be checked. If you have overpaid, you receive a refund; if you have underpaid, you must pay the difference.
Quarterly advances — a calculation example
For taxpayers paying quarterly advances the rules are the same, except that the settlement periods are longer. These taxpayers calculate an advance for each quarter, taking into account income earned since the beginning of the tax year.
Example: in 2026 a taxpayer earned the following income in each quarter: Q1 - PLN 45,000, Q2 - PLN 50,000, Q3 - PLN 10,000, Q4 - PLN 30,000. Total annual income is PLN 135,000.
A taxpayer paying quarterly income tax advances must take into account cumulative income since the beginning of the year. The advance for the first quarter is PLN 1,800 (45,000 × 12% - 3,600). The advance for the second quarter is PLN 6,000 (95,000 × 12% - 3,600 - 1,800). The advance for the third quarter is PLN 1,200 (105,000 × 12% - 3,600 - 1,800 - 6,000). As income since the beginning of the year exceeds PLN 120,000 after the fourth quarter, the second tax threshold must be taken into account for the fourth quarter.
- The advance for the first quarter is PLN 1,800
- The advance for the second quarter is PLN 6,000
- The advance for the third quarter is PLN 1,200
- The advance for the fourth quarter is PLN 6,600
Calculating the tax for the fourth quarter requires taking into account that the first tax threshold has been exceeded. The first-threshold tax is PLN 10,800 (120,000 × 12% - 3,600), and the second-threshold tax is PLN 4,800 ((135,000 - 120,000) × 32%). The total tax for the year is PLN 15,600, and the advance for the fourth quarter is 15,600 - 9,000 (total advances for three quarters) = PLN 6,600.
Comparison with other forms of taxation
The tax scale is not the only form of taxation available to entrepreneurs in Poland. The right form depends on many factors, including the level of income, the type of business and the taxpayer's individual preferences.
The main alternatives to the tax scale are:
- Flat 19% tax (podatek liniowy, 19% of income)
- Flat-rate tax on recorded revenue (ryczałt, different rates depending on the type of activity)
- Tax card (karta podatkowa, a monthly lump sum, only for taxpayers continuing it from 2021 — since 2022 it cannot be chosen for the first time)
The flat tax is 19 percent of income and does not include a tax-free amount. It may be beneficial for entrepreneurs with higher incomes, for whom the effective rate under the tax scale exceeds 19 percent.
The flat-rate tax on recorded revenue has different rates depending on the type of activity. The rates range from 2 percent to 17 percent of revenue, which may be beneficial for businesses with low costs (under ryczałt costs are not deducted).
An entrepreneur running a trading business with annual income of PLN 100,000 will pay under the tax scale: (100,000 × 12%) - 3,600 = PLN 8,400. Under the flat tax they would pay: 100,000 × 19% = PLN 19,000 (tax only, without the health insurance contribution). In this case the tax scale is much more favourable.
Tax planning under the tax scale
Effective tax planning under the tax scale requires taking into account the progressive nature of the system and the options for reducing the tax burden within the current rules. It is crucial to understand the threshold points and their impact on the effective tax rate.
Basic tax planning strategies include:
- Spreading income over time to avoid exceeding tax thresholds
- Using the available tax reliefs and deductions
- Optimising the timing of income and expenses
- Planning investments with tax reliefs in mind
- Considering a change of the form of taxation when income grows significantly
Exceeding the PLN 120,000 threshold raises the marginal tax rate from 12 percent to 32 percent. Tax planning should take into account this significant jump in the tax burden when the first threshold is exceeded
Pay particular attention to situations where income approaches the PLN 120,000 limit. In such cases it is worth considering moving part of the income to the next tax year or increasing tax-deductible costs in order to stay within the first tax threshold.
For entrepreneurs whose income significantly exceeds the first tax threshold, it is worth considering switching to the flat tax, especially when the effective rate under the tax scale approaches 19 percent.
